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It was unjustified interest rate rises in the first place that were the major catalyst and exacerbated the recession we had to have. As can be seen from Graph 5 the RBA was cutting interest rates the way a persian rug factory cuts prices from 1989 onwards, but it was too late. The damage...

1. Yes, they did this in 1989. However, lowering interest rates is not the issue here – raising them is. 2. Yes, this sounds good, but, you are assuming that everything raises by the same percentage value (5% CPI > 5% rent increase, etc, etc). This is, imho, highly unlikely. A 1%...